Electrical Workers' Pension Trust Fund of Local Union #58, I.B.E.W., Detroit, Michigan v. Metro Electric Engineering Technologies Company et al
Filing
25
ORDER granting 14 Motion for Judgment. Signed by District Judge Julian Abele Cook. (KDoa)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TRUSTEES OF THE ELECTRICAL WORKERS’
PENSION TRUST FUND OF LOCAL UNION #58,
I.B.E.W., DETROIT, MICHIGAN,
Plaintiff,
Case No. 12-11195
Honorable Julian Abele Cook, Jr.
v.
METRO ELECTRIC ENGINEERING
TECHNOLOGIES COMPANY and RADIANT
ENERGY CO.,
Defendants.
ORDER
This case relates to claims by the Plaintiffs, Trustees of the Electrical Workers’ Pension Trust
Fund (“Trustees”), who collectively contend that the Defendants, Metro Electric Engineering
Technologies Company (“Metro Engineering”) and the Radiant Energy Company (“Radiant
Energy”), breached their respective obligations to remit contributions to the pension fund
On August 10, 2012, a default judgment was entered against Radiant Energy. Currently
before the Court is a motion by the Plaintiffs for the entry of a summary judgment against the
remaining Defendant, Metro Engineering, as it applies to Count One in the Complaint.
I.
The multi-employer pension fund, which is the subject matter of this lawsuit, is administered
pursuant to Section 302 of the Labor-Management Relations Act, 29 U.S.C. § 186 and the Employee
Retirement Income Security Act, 29 U.S.C. § 1001. Defendant Metro Engineering was bound by a
collective bargaining agreement with Local Union #58, which required it to make periodic
contributions to the Electrical Workers’ Pension Fund on behalf of its employees.
According to the Plaintiffs, Metro Engineering was contractually obligated to remit
contributions to the pension fund pursuant to the parties’ collective bargaining agreement until June
27, 2010. Thereafter, Metro Engineering employees continued to perform the same work that had
been covered by the parties in their collective bargaining agreement with Local Union #58, and for
which contributions to the pension fund were required. Although Metro Engineering ceased to have
made any contractual obligation to continue its contributions to this pension fund beyond the June
27th deadline, its workers nevertheless continued to perform work of the type for which their
contributions to the pension fund had been required. Therefore, Metro Engineering caused a
withdrawal of liability to occur as authorized by §4203(b)(2) of ERISA, 29 U.S.C. §1383(b)(2).
On September 26, 2011, the Plaintiffs forwarded a “Notice of Assessment of Employer
Withdrawal Liability” (to wit, $190,732.00) to Metro Engineering. Several days later (November
14th), they - following a series of exchanges in correspondence between the parties - forwarded a
notice of an overdue payment to Metro Engineering, citing to § 4219(c)(5)(A) of ERISA, 29 U.S.C.
§1399(c)(5)(A). When no payments were received from Metro Engineering by March 1st of the
following year, 2012, the Plaintiffs claimed a right to assign a notice of default and acceleration of
liability upon Metro Engineering for its failure to remit payment pursuant to § 4219(c)(5) of ERISA,
29 U.S.C. § 1399(c)(5). No demand for arbitration has been received by the Plaintiffs from Metro
Engineering.
II.
The purpose of the summary judgment rule, as reflected by Federal Rule of Civil Procedure
56, “is to isolate and dispose of factually unsupportable claims or defenses . . . .” Celotex Corp. v.
Catrett, 477 U.S. 317, 323-24 (1986). The entry of a summary judgment is proper only “if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A fact is ‘material’ for purposes of summary
judgment if proof of that fact would have the effect of establishing or refuting an essential element
of the cause of action or a defense advanced by the parties.” Aqua Grp., LLC v. Fed. Ins. Co., 620
F. Supp. 2d 816, 819 (E.D. Mich. 2009) (citing Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
1984)). In order for a dispute to be genuine, it must contain evidence upon which a trier of the facts
could find in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986); Singfield v. Akron Metro. Hous. Auth., 389 F.3d 555, 560 (6th Cir. 2004).
When assessing a request for the entry of a summary judgment, a court “must view the facts
and all inferences to be drawn therefrom in the light most favorable to the non-moving party.” 60
Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir. 1987). The entry of a summary
judgment is appropriate if the nonmoving party fails to present evidence which is “sufficient to
establish the existence of an element essential to its case, and on which it will bear the burden of
proof at trial.” Celotex, 477 U.S. at 322.
Under these circumstances, the moving party has the initial obligation of identifying those
portions of the record that demonstrate the absence of any genuine issue of a material fact. Celotex,
477 U.S. at 323. Thereafter, the nonmoving party must “come forward with some probative evidence
to support its claim and make it necessary to resolve the differences at trial.” Boyd v. Ford Motor
Co., 948 F.2d 283, 285 (6th Cir. 1991); see also Anderson, 477 U.S. at 256. The presence or the
absence of a genuinely disputed material fact must be established by (1) a specific reference to
“particular parts of materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those made for purposes of the motion
only), admissions, interrogatory answers, or other materials,” or (2) a “showing that the materials
cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1).
III.
The Plaintiffs submit that they are entitled to an award of “withdrawal liability” against
Metro Engineering. The term, “withdrawal liability,” is derived from the Multiemployer Pension
Plan Amendments Act (“MPPAA”), 29 U.S.C. § § 1381-1453, which amended portions of ERISA
to increase the financial liability of those employers who withdraw from underfunded employee
benefit plans. Thus, “withdrawal liability” can be assessed whenever an employer - after
participating in a pension plan - withdraws from a multi-employer benefit plan that had been
developed through a collective bargaining process. “An employer’s withdrawal liability is its
proportionate share of the plan’s unfunded vested benefits, that is, the difference between the present
value of vested benefits (benefits that are currently being paid to retirees and that will be paid in the
future to covered employees who have already completed some specified period of service, 29
U.S.C. § 1053) and the current value of the plan’s assets.” Concrete Pipe and Prods. of Cal., Inc.
v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 609 (1993) (internal quotations and
citations omitted).
If an employer withdraws from a multi-employer plan, the ERISA plan trustees must notify
the employer of its withdrawal liability and the schedule for the payment of the indebtedness. 29
U.S.C. § 1399(b)(1). Disputes over the amount of withdrawal liability are generally subject to
arbitration. 29 U.S.C. § 1401(a)(1). If an employer does not satisfy its withdrawal liability, the
trustees are authorized to initiate a lawsuit to collect the deficiency in a federal court. 29 U.S.C. §§
1451(a)(1), (b) (“In any action under this section to compel an employer to pay withdrawal liability,
any failure of the employer to make any withdrawal liability payment within the time prescribed
shall be treated in the same manner as a delinquent contribution.)
The Plaintiffs proclaim that they are entitled to a judgment because the undisputed facts
show that Metro Engineering (1) withdrew from the pension fund, (2) received a proper notice of
the assessment of withdrawal liability, and (3) failed to seek arbitration within the permitted time.
Thus, they now seek a judgment because, in their opinion, Metro Engineering is precluded by law
from challenging the amount of withdrawal liability. Metro Engineering disagrees, contending that
the Plaintiffs’ request for a summary judgment is inappropriate because it should not be held
responsible for the withdrawal liability amounts that are attributed to Radiant Energy.
Metro Engineering was assessed with employer withdrawal liability of $190,732.00.
Objections to employer withdrawal liability assessments are subject to the statutory dispute
resolution procedures that have been outlined in 29 U.S.C. §1399. “Any dispute between an
employer and the plan sponsor of a multiemployer plan concerning a determination made under
Sections 4201 through 4219 shall be resolved through arbitration.” ERISA § 4221(a)(1), 29 U.S.C.
§ 1401(a)(1). This statute further states that “[i]f no arbitration proceeding has been initiated
pursuant to subsection (a) of this section, the amounts demanded by the plan sponsor under section
1399(b)(1) of this title shall be due and owing on the schedule set forth by the plan sponsor. The
plan sponsor may bring an action in a State or Federal court of competent jurisdiction for
collection.” 29 U.S.C. § 1401(b).
An examination of the record in this cause reveals that (1) the deadline for making a demand
for arbitration has passed, and (2) Metro Engineering has elected not to pursue the contested issues
through arbitration of the issues relating to its withdrawal liability. The Court concludes that (1)
Metro Engineering has waived any defenses and objections it could have raised in arbitration, (2)
the Plaintiffs are entitled to the sum of $190,732.00, in addition to interest at a rate as determined
by 29 C.F.R. §4219.32 from and after September 28, 2011. In addition, these Plaintiffs are entitled
to post-judgment interest on the total judgment amount as provided for in 28 U.S.C. §1961. Finally,
the Plaintiffs may be entitled to an award of reasonable attorney’s fees. See ERISA §502(g)(2), 29
U.S.C. § 1132(g)(2). Thus, and for the reasons that have been outlined above, the Court grants the
Plaintiffs’ motion for summary judgment on Count 1. (ECF 14).
IT IS SO ORDERED.
Date: October 23, 2012
s/Julian Abele Cook, Jr.
JULIAN ABELE COOK, JR.
United States District Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?